TREASURY

Inheritance Tax

Dawn Primarolo: In proceedings in Finance Bill Standing Committee on 25 June we announced that work was in hand to allow inheritance tax to be paid out of an estate before probate is granted. We have now reached agreement in principle with the British Bankers Association and the Building Societies Association on a direct payment scheme for inheritance tax. Broadly, where the deceased person has sufficient funds to their credit, participating institutions will be ready to transfer funds direct to the Inland Revenue to pay the inheritance tax due. We are now working with the associations to finalise the detail of the processes concerned, and help their members prepare for the launch. The Government hope to see the maximum possible take-up of this welcome scheme, which will start later this year.

TRADE AND INDUSTRY

Regional Innovation Fund

Alan Johnson: We have published today the interim evaluation of the regional innovation fund which was carried out by DTZ Pieda Consulting on behalf of the Department of Trade and Industry.
	Broadly, the report examines processes, efficiency of funding and initial outputs to inform consideration of value for money and the regional development agency single pot spending strategy.
	DTI is to meet with the regional development agencies over the next few months to discuss the findings of the evaluation and its impact on programme delivery within the single pot funding regime. Copies of the evaluation report have been placed in the libraries of both Houses.

ENVIRONMENT FOOD AND RURAL AFFAIRS

Water Price Limits

Margaret Beckett: I have today issued initial guidance to the Director General of Water Services setting out the Government's water policies in England for Ofwat's 2004 periodic review of water price limits. The review will produce price limits, set by Ofwat, for the years 2005–2010. The Government will assist the review with policy guidance at key stages.
	This first instalment of guidance specifies all the policy areas that the Government expect to affect water and sewerage companies' obligations in the years 2005–2010. In particular, it sets out a number of potential improvements that companies may be expected to make in their water resources policies, on drinking water quality and to help environmental water quality.
	The guidance is about ensuring regulators and water companies take account of future policies affecting the water and sewerage industries, be they environmental, social or economic. Previous periodic reviews have produced ambitious and successful programmes of improvement in water and environmental quality. The Government will expect these gains to be maintained and, where possible, further improvements to be made.
	In deciding how far and how fast to take improvement programmes the Government will also take account of the effects on customers. The guidance identifies some of the themes that will be of increased importance in this review. First, there will be greater attention paid to the existing water and sewerage system, including issues of asset maintenance, leakage and sewer flooding. Second, the Government wish to see some further improvements in the water environment, based on sound information. Thirdly, policy choices must give due weight to the economic and social effects of water policies, especially on those who are most vulnerable.
	The water companies and regulators should next work together to design and cost the measures that would be necessary to deliver the possible range of policies set out in the guidance. This work should include consideration of the cost-benefit and cost-effectiveness of measures.
	Many of these policies will arise from European or other statutory obligations, but there are still many policy choices to be made. In the light of further advice from the regulators in the second half of 2003 on the benefits of policies and their potential impacts on customers' water bills, I will take decisions on what policies should proceed. I will then issue my principal guidance on this early in 2004.
	Ultimately, the people who matter most in this review process are the customers and it is their interests which most forcefully inform the policies contained in the guidance. Customers are concerned with more than simply paying their water bills, but also in being able to enjoy the benefits of clean water through the tap and in the environment, and it is important that our policies strike the right balance in their interests.

WORK AND PENSIONS

Benefit Fraud (Rotherham)

Malcolm Wicks: On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the Benefit Fraud Inspectorate (BFI) inspection report on Rotherham metropolitan borough council was published today and copies of the report have been placed in the Library.
	The BFI undertook a first inspection of Rotherham metropolitan borough council in October 1999, and the report was extremely critical of the council's housing benefits service.
	This follow-up report finds that the council has failed to implement the majority of the BFI main recommendations from the first inspection. The council has not implemented a prosecution policy and no sanctions have been applied. There is still no management-checking regime and the council has failed to introduce the verification framework despite having plans to do so after our first inspection.
	While there are some improvements in overpayment work, the lack of management information meant that BFI could not report in any detail on this area.
	The council has developed an action plan for improvement. It has also completed a performance standards self-assessment of all areas and drafted a prosecution policy, which has been approved by Members. However, the council's track record raises doubts as to whether improvement will be achieved within a reasonable timescale.
	In 2001–02, Rotherham metropolitan borough council administered approximately £56.5 million in housing benefits. This is approximately 13 per cent of its total gross revenue expenditure.
	The report makes recommendations to help the council address the remaining weaknesses and to further improve the administration of housing benefit and council tax benefit, as well as counter-fraud activities.
	My right hon. Friend the Secretary of State is now considering the report and will be asking the council for its proposals in response to the findings and recommendations of the BFI.

EDUCATION AND SKILLS

14–19 Next Steps

Charles Clarke: We are today publishing our response to the consultation on the Green Paper, "14–19; extending opportunities, raising standards", which we published in February 2002.
	The response document, copies of which will be placed in the Library of the House today, sets out our proposals for reform of this critical phase of young people's education. We have three key objectives:
	Our immediate task is to give assurance to students and the wider community that the existing system is stable and effectively managed—this remains our short term priority.
	In the medium term, we will make practical changes to introduce more flexibility and choice so that students' programmes can be better tailored to their needs and aptitudes.
	For the longer term, we need to discuss and implement reform that will put in place a system that is fit for 21st Century needs. The short term
	Mike Tomlinson's two reports following his independent inquiry into last summer's A-level problems provide a sound basis for restoring confidence in the A-level system. In his final report, he offered an assurance, which we accepted, that the actions he has recommended would secure the standards and integrity of the 2003 examinations. The QCA and the relevant awarding bodies are urgently taking forward those recommendations to secure the effective delivery of this year's examinations and to ensure that the problems of last summer cannot be repeated.
	Next Steps for the medium term
	We will make changes to the curriculum, which will give students greater freedom to choose programmes of study that better meet their needs and strengths. We will reduce the number of compulsory subjects in key stage 4 to English, mathematics, science and ICT, with an entitlement to study another language, design and technology, an arts and a humanities subject. We announced our broader conclusions on modern foreign languages in our language strategy in December. All 14–16 year-olds will learn about work and enterprise, and will also continue to be taught citizenship, religious education, sex education, careers education and physical education. Students will be entitled to study literacy, numeracy and ICT up to age 19 until they have achieved a level 2 award (equivalent to a good GCSE). But we have decided not to proceed for the present with our proposal to introduce a new A "with distinction" grade at A-level, preferring rather to support advanced extension awards.
	We will further improve the choices open to young people by developing "hybrid" GCSEs that combine traditional general subjects with their vocational applications. We will discard the unhelpful distinction between "vocational" and "academic" GCSEs and A-levels. We intend to improve and expand modern apprenticeships so that by 2004 28 per cent. of young people will be able to enter them.
	We will develop a consistent approach to teaching and learning across the whole 11–19 age range in schools and colleges. We will pilot a range of measures, building on the proposals set out in "Schools: achieving success and Success for All", drawing on existing best practice and the opportunities presented by e-learning.
	These reforms will be delivered through local innovation and partnership, bringing together different learning institutions and employers. The Green Paper proposed a programme of 14–19 pathfinders to test local delivery in a range of settings. We have announced the first 25 year one pathfinders across all regions in a variety of local circumstances to expand collaboration in innovative ways, building on the increasingly distinctive specialisms of local schools, colleges and training providers. We expect all of them to be in place by the end of January 2003. We will shortly be inviting expressions of interest for a second round of pathfinders to begin in September 2003. We will introduce a range of measures to support local delivery of the 14–19 agenda, including practical changes in inspection and performance management arrangement and funding flexibilities. Reform for the longer term
	These measures will help to improve participation and achievement while avoiding further major upheaval in a system that has undergone substantial recent change. We are clear that, in the longer term, further changes must address:
	the need for a much stronger vocational offer;
	the requirement for more manageable assessment, which recognises all of a young person's achievements;
	the aim of broadening choice and stretching students, with a unified framework of qualifications designed to provide opportunities for young people of all abilities.
	We will appoint a working group for 14–19 reform, under the chairmanship of Mike Tomlinson and with its membership drawn from those with direct experience of 14–19 education, higher education and industry, to consider and make recommendations on these longer term issues. We have asked Mike Tomlinson to report the group's interim conclusions within one year, with a view to finalising its work within 18 months.
	Together these immediate and longer term reforms will help us realise our vision of a 14–19 phase of flexible, yet structured provision, delivered by schools, colleges and others working innovatively together to meet the needs of all learners and of the economy.

HOME DEPARTMENT

Crime Reduction and Drugs Misuse

David Blunkett: I am making a total of £144 million available for crime reduction spending and combating drugs, in the light of local needs. In addition, following my statement on 3 December on the updated drug strategy, we will be spending £46.2 million on expanding services to refer people into treatment through the criminal justice system.
	I am announcing the allocation of £94 million on local crime and drugs spend for 03–04 on building safer communities. The co-ordination between the current funding streams (the safer communities initiative, communities against drugs and partnership development fund, along with the drug action team (DAT) development fund) will be enhanced, and I am consulting whether they should be merged into a single pot. This would help devolve resources and responsibility to the local level; further the Government's policy under the review of area based initiatives of reducing the number of funding streams, to enable local partnerships to focus on reducing crime rather than on paperwork. I hope to make a further announcement about this very shortly. These funds will include money specifically earmarked to strengthen partnerships "and drugs teams" capacity to deliver, through training and other support, to ensure those fighting crime and drugs are as well equipped as possible in their efforts. They recognise the integration of DATs and crime and disorder reduction partnerships (CDRPs) and the need to streamline their working practices.
	Enhanced co-ordination will encourage partnerships to look at both aspects of the problem, and the misery it causes communities, as one issue to be tackled holistically. The money can be used in a huge variety of ways.
	Partnerships are showing that they can use our programme funding to deliver a wide range of interventions. They are using it to reduce gun crime; to disrupt drugs markets through direct police work; running activities designed to divert children from getting involved in crime and drugs; paying for more CCTV cameras or targeted campaigns on particular crimes or drugs hotspots, or for warden schemes. These are just examples and the views of the community are key for informing local decisions.
	Partnerships can spend less time dealing with the paperwork, separate reports for each funding stream etc, and more on driving down crime and delivering safer communities.
	Today's announcement also includes the details of what each basic command unit (BCD) will receive from the £50 million BCD Fund, with shares ranging from £590,000 to £30,000. This annual fund is designed to help police meet the individual crime reduction needs of their local area and tackle the priorities set out in the national policing plan—which includes combating gun crime. The fund can be spent on crime prevention work such as targeted police operations, youth diversionary schemes, or security advice campaigns for the public.
	Seventy three million pounds of the money is going direct to Partnerships with a further £21.7 million available locally for capacity and training purposes for them and drug action teams. The £50 million BCD fund should be used to complement this expenditure to tackle the priorities set out in the national policing plan and in local crime reduction strategies.
	I said on 3 December that we would be introducing a comprehensive end-to-end approach to refer people into treatment via the criminal justice system in the highest crime areas with the worst drug problems. These areas will be those containing the 30 basic command units with the highest rates of acquisitive crime. A total of £46.2 million will be spent in these areas to deliver a range of services I outlined in my previous statement.
	I have placed a copy of the allocations and a note summarising the proposed interventions and a list of the 30 BCUs and the relevant DAT areas in the Library and the Minister for Policing and Crime Reduction is writing to hon. Members with further information about the allocations.